Iran: Automakers Might Phase Out Pride, Peugeot 405 in June

EghtesadOnline: Automakers Iran Khodro (IKCO) and SAIPA are expected to end the production of two low-quality cars, Peugeot 405 and Pride, which have been made in Iran for decades.

News ID: ۷۵۰۱۰۰

21 May 2020

“IKCO’s Peugeot 405 and SAIPA’s Pride will not be produced as of mid-June,” the national Traffic Police chief, General Kamal Hadianfar, said at a press conference on Tuesday, IRIB News reported.

Referring to the gradual process set in motion by SAIPA as Pride has five models, Seyyed Javad Soleimani, the company’s CEO, said, “We stopped manufacturing Pride models 132 and 111 in December 2019 and April respectively.”

Soleimani noted that the remaining models 131, 141 and 151 will be phased out in a month, putting an end to the Pride’s story.

The Institute of Standards and Industrial Research of Iran had earlier announced that the automakers are ordered to offer alternatives for the models or develop new cars that comply with standards.

Nayyereh Pirouzbakht, the head of ISIRI, said those who have already purchased the targeted models will receive their vehicles before the set date (June 2020), but license plates will not be issued for vehicles produced after this date.

The move is based on a multilateral agreement reached by the two domestic carmakers (IKCO and SAIPA), the Industries Ministry and Iran Traffic Police.

Policymakers and industry executives had also promised to halt the production of these two cars and replace them with better quality vehicles in the past, but this did not materialize in the absence of suitable alternatives.

Amir Hassan Kakaei, a market analyst, believes there are no suitable alternatives for these models.

"The automakers continue to recommend substitutes that are of better quality compared to Pride and Peugeot 405, but the wide price difference makes the substitutes unappealing for customers," he said.

Kakaei believes there are actually no substitutes for the two models, but their retirement "will force customers to go for other models".

Killer Machine

Pride was originally developed for Japanese and South Korean markets in the late 1980s. The car was widely sold in the United States as a Ford Festiva in the early 1990s. It entered the Iranian market in 1993 under license from Kia and has continued to be a cash cow for SAIPA.

Referring to a recent study conducted on Iranian road traffic accidents recorded over the past decade, General Hadianfar said in late September that Pride was involved in one-third of the fatalities.

Road accidents claimed 206,049 lives in the 11-year period ending March 2019, data from Iranian Legal Medicine Organization show.

According to the research findings, up to 34% of the figure, constituting 70,056 victims, died in a Pride car.

“Speaking of driving safety, drivers’ adherence to traffic regulations is of the highest importance, but the vehicle’s quality also matters. Pride lacks the required standards of a regular passenger car and leads to an average of 3.8 deaths in each crash,” Hadianfar added.

Standards Issues

As per reports by Iran Standards and Quality Inspection Company, the national body in charge of inspecting vehicles, Pride suffers from low quality and several safety failures.

In fact, the car never earned more than one star in the organization’s five-star ranking system.

The model has been produced for more than two decades now, until it was thrust into the limelight when the director of ISIRI publicly criticized the continued production of the inferior model.

Three years ago, ISIRI and Iran’s Automotive Policymaking Council set new automotive standards and gave a two-year ultimatum to automakers to comply.

The production of vehicles that fail to comply with 83 automotive standards was expected to be halted by the end of 2018. SAIPA's Pride topped the elimination list. However, when the deadline drew closer, carmakers started protesting about “the sudden imposition of stringent rules”.

Carmakers complained that if the new standards are imposed, they will be forced to shut down 70% of their production lines and lay off thousands of workers.

Despite growing criticisms from environmentalists and the public opposition to Pride production, former CEO of SAIPA, Mehdi Jamali, had earlier declared that its production will continue “as long as there is demand for the model”.